The Second District Court of Appeals recently issued a decision regarding a settlement agreement in a Florida premises liability case. The plaintiff appealed a final order enforcing a settlement agreement in favor of the defendants–a Health Center. Following a lawsuit against the Health Center, the parties entered into a settlement agreement which allowed the Health Center to satisfy the final judgment if they “timely made” thirteen monthly payments. The agreement included a specific payment schedule and stated that if a monthly payment is late, the defendant had ten days to cure it from the date the plaintiff made written notice.
The first two monthly payments were three days and two days late; in both situations, the Health Center promised that the payments were forthcoming. As such, the plaintiff refrained from sending the ten-day cure notice. After the Health Center failed to make the payment, the plaintiff moved for a default judgment; however, the parties agreed to reinstate the settlement. This pattern continued for the next several months; however, the defendants did not argue the validity or effectiveness of the settlement agreement. The defendant sent the final payment with a notice stating that they were expecting a release from judgment. The plaintiff rejected the final payment, arguing that the defendants were in breach of the agreement based on the late payments. The defendant moved to enforce the agreement.
In Florida, courts reviewing settlement agreements look to the ordinary meaning of the contract’s language. In this case, the agreement stated that the plaintiff would only accept the agreed-upon sum if the defendant made timely payments. Further, the agreement stated that the plaintiff could declare a default judgment if the payment were not received during the ten-day cure period. The defendant argued that the plaintiff’s acceptance of late payments rewrote the contract. The court explained that although subsequent conduct can modify terms in a contract, nothing in this situation indicated an intent to change the terms. Even though the plaintiff did not send a ten-day cure notice after the first two late payments, they did so at the third late payment. When the defendant did not respond, the plaintiff moved to declare a default judgment. Moreover, every receipt for subsequent payment stated that the payment was being accepted in “partial satisfaction of the Amended Final Judgment.” As such, the original settlement agreement terms remained effective.
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